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NCAA legal filing reveals fears of college sports officials

Lawyers for the NCAA wrote in a federal-court filing Thursday that if the association’s current amateurism rules were lifted, as proposed in a lawsuit pertaining to the use of college athletes’ names, likeness and images, some schools might exit Division I or Bowl Subdivision football because of the financial and legal burden that would result from needing to share revenue with football and men’s basketball players.

The assertion was backed by written statements from a group of conference and university executives, including the University of Texas’ top athletics officials, the chancellor of the California State University system and the presidents of Utah State and Wake Forest.

Texas “has no interest in a model that would force us to professionalize two sports to the detriment of the balance of the athletics department’s sports, fitness and educational programs,” says a statement from Texas athletics director DeLoss Dodds and Texas women’s athletics director Christine Plonsky. Dodd and Plonsky oversee a program that generated a college-sports record $163.3 million in 2011-12, according to its recent financial report to the NCAA report.

Wake Forest “might cease playing Division I or Football Bowl Subdivision sports entirely if pay-for-play became a reality,” says a statement from university president Nathan Hatch.

Hatch also cited gender equity concerns, as did CSU chancellor Timothy White. “Paying male athletes for their participation in sports would seriously undermine the objectives of Title IX and CSU’s ability to remain in Title IX compliance,” said the statement from White whose university system includes nearly 10 NCAA Division I schools.

Utah State president Stan Albrecht’s statement said in “pay-for-play” scenario, “it is likely that USU would not be able to fund the 16 sports that the NCAA requires to qualify for Division I.”

Albrecht’s statement also revealed that at present, a Utah State athlete “receives four to five times the amount of financial support from the University than a non-student-athlete receives. That amount would necessarily increase for football and men’s basketball. … That model would not be feasible financially or consistent with USU’s institutional principles.”

The statements were among a massive set of documents the NCAA and its co-defendants unloaded in a U.S. District Court in California in an aggressive attack on efforts to have the case certified as a class action that would potentially involve thousands of former and current football and men’s basketball players, billions of dollars in damages and pose a threat to the current system of how athletes are compensated for playing these sports in college.

Thursday’s filings, comprising several different legal arguments and hundreds of exhibits, totaled nearly 2,100 pages. Among the exhibits are three expert reports and the recently gathered statements from nearly two dozen NCAA, conference and university officials.

The volume and vociferousness of the NCAA’s filings comes in the wake of a ruling in late January by Judge Claudia Wilken, in which she allowed the plaintiffs’ lawyers proceed with efforts to have the case certified as a class action even though the NCAA and its co-defendants had filed a motion in October 2012 to end them, in part because they contended the plaintiffs had changed their legal strategy in a way that was unfair. (The NCAA’s lawyers renewed that contention Thursday.)

The suit, initially filed in May 2009, is against the NCAA; video-game maker Electronic Arts and the nation’s leading collegiate trademark licensing and marketing firm, Collegiate Licensing Co. Its named plaintiffs include former basketball stars Ed O’Bannon, Oscar Robertson and Bill Russell.

The plaintiffs allege that the defendants violated anti-trust law by conspiring to fix at zero the amount of compensation athletes can receive for the use of their names, images and likenesses in products or media while they are in school and by requiring athletes to sign forms under which they relinquish in perpetuity all rights pertaining to the use of the names, images and likenesses in ways including TV contracts, rebroadcasts of games, and video game, jersey and other apparel sales.

In seeking certification of their suit as a class action, the plaintiffs’ lawyers said that while they are seeking monetary damages on behalf of former athletes, they “do not seek compensation to be paid to current student-athletes while they maintain their eligibility” but rather “a less restrictive, namely that monies generated by the licensing and sale of class members’ names, images and likenesses can be temporarily held in trust” until their end of their college playing careers.

Hatch’s statement in Thursday’s filing said: “Instituting a pay-for-play model, even if the payments are deferred to after graduation would change the nature of the relationship Wake Forest has with its football and men’s basketball student-athletes. It would, essentially, turn those teams into professional squads. That would not be acceptable to Wake Forest.”

The statements of Hatch and the other officials were part of NCAA lawyers’ attack on the work of plaintiffs’ expert Roger Noll, an economics professor emeritus at Stanford. Noll’s report in the case report provided a method of “determining how … revenue would allocated between colleges and student-athletes in the absence of the restrictions that the NCAA imposes,” the plaintiffs said in a previous filing. Noll’s method is based on a 50-50 split for telecasts and a one-third split for video games based on recognized economic principles, examples from pro sports, and examples from music artists’ licensing, plaintiffs’ filings and Noll’s report say.

In Thursday’s filings, the NCAA’s lawyers not only questioned the validity of Noll’s methodology and his proposed method of determining how the athletes’ share of the revenues would be divided among the athletes, but also argued that his report is not admissible. (They specifically asked Wilken to strike Noll’s proposed testimony and that of another plaintiffs’ expert.) Citing a deposition of Noll, the NCAA lawyers wrote that Noll “admits that one of the key features of his ‘model’ – the 50-50 ‘revenue split’ between schools and class members – is based not on any economic analysis but rather his personal ‘assumption’ that it is correct.”

The NCAA lawyers also said that even if Noll view is accepted, “The likelihood that at least some schools would simply stop providing athletics-based aid … either by eliminating their football or men’s basketball team, or by adopting a Division III model prohibiting all athletics-based aid means some portion of the class is better off in the real world … and therefore suffered no antitrust impact from Division I’s allegedly illegal rules.”